FEMA to raise flood insurance rates for 77% of Louisianans

Local News

Buildings and homes are flooded in the aftermath of Hurricane Laura Thursday, Aug. 27, 2020, in Cameron, La. (AP Photo/David J. Phillip)

LOUISIANA — 77 percent of Louisianans with flood insurance will see an increase in rates beginning in October when the Federal Emergency Management Agency (FEMA) implements Risk Rating 2.0 for the National Flood Insurance Program (NFIP).

FEMA will roll out the new rates in two phases, according to their website:

  • New policies beginning Oct. 1, 2021, will be subject to the new rating methodology.
  • All remaining policies renewing on or after April 1, 2022, will be subject to the new rating methodology.  

Starting August 1, policyholders can contact their insurance companies or agents to learn more about what Risk Rating 2.0 means to them.

The Risk Rating 2.0 page on FEMA’s website states, “A significant part of FEMA’s NFIP Transformation is Risk Rating 2.0, which will fundamentally change the way FEMA prices insurance and determines an individual property’s flood risk.”

It also says, “under the current methodology, all NFIP policyholders have been subject to premium increases every year.”

U.S. Senator Bill Cassidy, M.D. (R-LA) has been working with U.S. Senator John Kennedy (R-LA) to prevent an increase in flood insurance rates. Cassidy released the following press release regarding Risk Rating 2.0:

FEMA just announced plans to raise flood insurance on Louisianans, including on those hit by Hurricanes Laura and Delta. FEMA’s decision will harm Louisiana’s recovery. We are working with FEMA to prevent any excessive premium hikes.

Instead of focusing on mitigation to elevate those trapped in the cycle of flooding and high premiums, Risk Rating 2.0 uses a counterproductive approach of targeting homes outside of flood zones with higher insurance premium increases.  

Last Congress, Cassidy introduced bipartisan legislation to reauthorize and reform NFIP.  This bill included provisions to ensure no steep rate hikes from Risk Rating 2.0, which increases premiums for 80 percent of Louisiana policyholders – some by hundreds of dollars annually. Without reforms, some homeowners will be forced to drop coverage or lose their homes. Cassidy’s legislation would protect policyholders from exorbitant premium hikes by capping annual increases at nine percent.  

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